Prop. 13 Critics' Warnings Come True in Rural Counties

REDDING — It may have been a long time coming, but a relentless financial hammerlock that Proposition 13's strongest foes had predicted 10 years ago is beginning to grip California's thinly populated rural counties.

In October, Shasta County supervisors ordered libraries closed, denying the county's 125,000 residents ready access to any public library system.

In November, supervisors closed the 73-bed General Hospital, the only public hospital serving several rural northern counties.

Thirty miles down Interstate 5 in Red Bluff, Tehama County supervisors were able to keep three of their 11 branch libraries open and maintain county services for the county's 42,000 residents at near current levels. But there was a high price: The county budget is $600,000 out of balance.

Government May Shut Down

Barring bailout money from the Legislature, "the chances are about 50-50" that Tehama County government may close its doors for a couple of weeks in June when it runs out of money, said John Sims, administrative assistant to the Board of Supervisors.

Adjoining Butte County, population 157,000, is looking at the possibility of simply abolishing much of county government and replacing it with community service districts that can use property tax revenue any way they want.

"If Butte County is the Titanic and it's sinking--and our bow is slipping below the waves--then we're talking about taking the various functions of government and putting them in separate lifeboats," county administrator Martin Nichols said.

California counties--particularly those sprinkled across the vast reaches that comprise the northern third of the state--are in serious financial trouble nearly a decade after voters took politics into their own hands by passing Proposition 13 on the June, 1978, ballot.

The measure, which clamped a 1% lid on property taxes and restricted increases in yearly assessments, wiped out the primary method counties had of getting new money: raising the property tax.

Californians' property taxes, which had gone into the treasuries of local governments and schools, were cut by a whopping 57%.

Required Programs

At the same time, the state continued to require counties to administer costly programs in four major areas where expenses could not be controlled merely by adjusting the ledger books.

The state pays much of the costs of courts, welfare and health care for the poor. But counties must pay a share, and they must offer benefits ordered by law to anyone who qualifies.

The costs of those state-required programs have increased dramatically, leaving counties with less to spend on traditional services like libraries, parks and roads--the so-called discretionary programs.

At the time Proposition 13 was enacted, counties spent about 30% of their budgets on discretionary items, said Larry Naake, executive director of the County Supervisors Assn. of California. Now the figure is less than 5%.

For several years, a crisis was averted by bailout money from the state budget surplus and federal revenue-sharing funds. But those sources have dried up.

Cities, too, have cut back services in the aftermath of Proposition 13, but they do not have the burden of required programs with uncontrollable costs. And state law gives them more ways to raise revenues.

The fiscal squeeze is felt most acutely in sparsely populated counties where there is little growth to yield new tax revenue. It is a double whammy: Those regions also have less clout in the battle for Sacramento treasury dollars than heavily populated areas that elect more legislators.

Local officials are dreaming up ways to cope with scarce dollars that range from the unprecedented to the tried and true.

In Humboldt County, home to 107,000 people, officials gave up on maintaining many county roads, replacing worn pavement with gravel.

'On Our Way Back to 1934'

"It made a lot of people unhappy," county Administratve Officer Robert Hendrix said. "We're on our way back to 1934 in the way our roads are maintained."

Sierra County, population 3,320, offers no extra services like libraries and parks and strains under the yoke of paying $1.2 million for five murder cases it must prosecute.

The county, which has no reserve for unforeseen emergencies, imposed for the first time $130,000 in trash disposal fees to raise more revenue. "We'll make it if we don't have any disasters," Auditor Donald Hemphill vowed.

Few counties are escaping the squeeze even in more heavily populated regions. "It's spreading," Naake said.

Fresno County, the nation's No. 1 agricultural producer with an economy largely dependent on the whims of the marketplace, has eliminated more than 600 public jobs in the last three years.